10 minute read 15 Feb 2018
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How to give an IPO the best chance of long-term success

By Martin Steinbach


Over 20 years of experience in the corporate finance field: IPO, M&A, private equity, venture capital and mezzanine finance. IPO thought leader.

10 minute read 15 Feb 2018
Related topics IPO Innovation

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Here are some strategic considerations for companies to implement before, during and post-IPO launch.

Companies that have achieved a successful Initial Public Offering (IPO) know the process involves the complete transformation of the people, processes and culture of the organization.

This means preparation is critical – making a move before you’re ready could turn a strategy designed to drive growth into a significant risk. We’ve found the most successful IPO candidates often spend two years or more building business processes and infrastructure, recruiting executive and consulting talent, getting in front of financial and reporting issues and ensuring the commitment of the board of directors and other key stakeholders to their strategy.

You can download our full report here (pdf).

Throughout the IPO value journey to become a public company, an organization must remember to prepare not only for the defining moment of the IPO ceremony – the ringing of the bell – but also for a whole new phase of corporate life after the IPO takes place.

That’s why market outperformers treat the IPO as a long-term transformational process.

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Chapter 1

Why consider going public?

An IPO can be an attractive option for organizations from a range of sectors and backgrounds, and can help meet diverse goals.

An IPO is the first sale of a company’s shares to the public and the listing of shares on a stock exchange. It allows a company to raise capital to build its business by creating newly issued shares – or selling existing shares.

This means a successful listing can help your company unlock access to financing to complete a strategic acquisition, create opportunities to expand your business into new markets or to provide an exit opportunity for your private equity or other investors. In addition, it can also improve perceptions of your business and brand with customers, suppliers and employees.

There are many situations – and mixtures of motivations – that can lead companies start to evaluate an IPO as one of their strategic options. For instance:

  • High-growth companies: IPO to fund innovation, growth, acquisitions and internationalization
  • Private equity (PE) and venture capital (VC) owners: IPO as a way to exit and to further fund growth of portfolio companies
  • Family business – the company: IPO as integral part of the succession plan and to separate management and ownership 
  • Family business – the owner: IPO to diversify wealth and to better manage succession
  • Scale-up companies: IPO as a way to better attract talent and to incentivize management
  • Conglomerates: IPO as a transaction to carve out and partial or full exit of business units 
  • State-owned entities: IPO to privatize

But it’s also important to remember that a successful IPO is not simply about whether the market is ready for you, but – more importantly – are you ready for the market? Do you know what you’re letting yourself in for? If you’d like to download the full report, please look for "Show resources" on the left side of the page.

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Chapter 2

The pros and cons of going public

An IPO is not for everyone: weigh the potential benefits and pitfalls to maximize your chances of success.

No matter your circumstances, every organization is different – and faces different challenges and goals. And even if an IPO looks right today, no one can guarantee that equity market conditions will be right once the preparation is complete. This is why many companies prepare for a possible IPO at the same time as pursuing a trade sale, M&A or other funding.

The key question is not, “Could an IPO be an option?” – it’s, “Could an IPO be the right option?”

To make sure you’re making the right move requires a good deal of investigation. And as with any significant strategic move, when weighing your options and determining the best moves forward, you should chart several options and consider different paths before fully committing to one choice.

This is in line with the first question from investors at an IPO road show:

Why are you going public and how would you use the proceeds of an IPO?

Answering these fundamental questions is key to successfully going public. If looking for fresh growth, an IPO or a sale in the M&A market are valid strategic options for shareholders and entrepreneurs to consider alongside debt, loans from banks or bond offerings. But it’s not going to be the right option for everyone.

To ensure you’re making the right move, it’s important to evaluate all possible transactions that could serve as stepping stones or attractive alternatives to a public listing in the context of shareholder and corporate objectives – as well as which capital market, stock exchange and listing segment makes the most sense. And remember – while there are a number of benefits to going public there are also some downsides:



Efficient access to capital markets to raise money through equity and bond offerings 

Time-consuming tasks, particularly investor relations and corporate governance duties

Flexibility to trade shares with high liquidity and daily valuation

Greater transparency and disclosure requirements

Greater attention, better brand recognition and prestige with consumers

Total IPO flotation costs

Shares functioning as new liquid M&A currency

Add-on costs associated with the ongoing requirements as a listed company

Potential to diversify wealth on shareholder side

New investors with voting rights

Enhanced ability to attract, retain, reward and incentivize valued employees

Pressure to deliver on your promises

Consider these pros and cons carefully – and in addition, ask yourself:

  • Do your financials make sense, and is your company’s performance consistent year after year?
  • Is management in place and ready for the hurdles that await them?
  • Is your ‘story’ ready to be told, and will it be embraced?

Sailing crew
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Chapter 3

Four phases of a successful IPO value journey

Introducing your guide to going public.

Getting ready for a public offering means implementing change throughout the business, organization and the corporate culture. As a public company, you will be subject to increased filing requirements, transparency, compliance, scrutiny by investors and analysts, and overall accountability for delivering on promises.

The most important thing is to approach the IPO as a transformational process rather than just a financing event – and to start early. From our more than 30 years’ experience working with companies before, during and after their journey to going public, we’ve identified four key phases – each with several important steps – to maximize your chances of success. Together, these form the framework of our Guide to Going Public.

Phase 1: Strategic considerations and IPO planning

12–24 months prior to IPO

  • Evaluate strategic options and perform a health check, ideally an IPO readiness assessment and diagnostic
  • Decide on the preferred option, a Plan B and set up resources and your IPO project management office. 
  • Prepare group systems, new functions and tax optimization at the company and shareholder levels. 
  • Start to build capital market infrastructures and/or make structural adjustments to achieve IPO readiness.

Phase 2: IPO preparation

6–12 months prior to IPO

  • Fine-tune the business plan and IPO fact book, and prepare presentation materials for banks, analysts and investors.
  • Build the right external IPO team (bankers, lawyers, auditors, investor relations and other advisors).
  • Set the target IPO timetable, start due diligence, and prepare the offering concept.
  • Fine-tune the equity story and valuation framework based on initial feedback from investors.

Phase 3: IPO transaction

1–6 months prior to IPO

  • Prepare financial information and other important content for the first draft of the offering prospectus.
  • Manage the filing process, finalize prospectus and seek approvals from the regulator and the stock exchange.
  • Launch the investor road show, to attract the right investors in main pools of capital with the right market timing.
  • Build the IPO order book, determine the issue price and allocate orders to investors.

Phase 4: IPO and being public


  • Enjoy the IPO ceremony and deliver on your promises as a public company that attracts more media attention.
  • Mobilize investor relations, road shows and investor marketing based on the IR calendar.
  • Manage investor expectations with efficient forecasting and the use IPO proceeds.
  • Deliver high-quality external reporting and disclosures, and good corporate governance.
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Chapter 4

Delivering long-term value as a public company

Finding the right ongoing strategy so you don’t regret your IPO.

With the transaction out of the way, it might be tempting to relax and continue with a business as usual mind-set. But once your company goes public, the real work of running a newly public company begins. From our experience, if the company wants to excel in the market, it should keep moving forward with a consistent – if not amplified – pace.

Unless the market’s interest in the company is properly and carefully maintained after the IPO, the initial euphoria and press interest will quickly fade. The trading volume and value of the company’s shares may also decline.

This means an aftermarket strategy is vital to maintain the value and benefits of going public. Almost as soon as the IPO is over, the process of retelling and fine-tuning your company’s equity story begins.

Meeting – and managing – expectations

The public markets are an unforgiving place. Management must strive for accuracy in projections and forecasts so that targets are being met quarter after quarter. For a public company, a single negative news item that is not well managed by the Investor Relations (IR) function can have a significant impact on stock price.

But now that you’re public, you also need to remain in the public eye to maintain investor interest. Through ongoing dialogue, conference attendance and non-deal road shows, you should cultivate an open channel of outreach to potential investors and for targeting sell-side analysts from a broad universe of firms.

Today’s share trading is dominated by many high-speed global networks and remains a fast-moving environment with higher demand for faster IR response to investors’ requests. This means you must develop a proactive IR strategy that will attract the optimal ownership mix and long-term pipeline in the aftermarket – targeting the type of investors that will maximize liquidity and valuation.

High-performing companies delegate key communication responsibilities to their IR team. The IR officer will help to build your strategy and guide communications to stakeholders and the media throughout the entire process of launching the IPO – and after going public.

Sustaining your strategy for success

Private companies are often unaware of the level of accountability and scrutiny faced when going public. They often underestimate the time and skill needed to court a new pipeline of public investors and to maintain aftermarket support. Being newly public, you acquire a new range of stakeholders that will demand and require much greater transparency in your business.

Growth is the key driver for market leaders. Investors prefer companies that plan to use the IPO proceeds to accelerate growth, whether through expanding their operations, moving into new geographic markets, acquiring other companies, developing new products and services, enhancing marketing and branding or upgrading technology and infrastructure.

Market outperformers deliver long-term shareholder value by demonstrating consistently effective investor relations and finance functions and, most importantly, operational excellence.

The efforts that companies put into getting the business ready for public life is invaluable, but from our experience, this is only the foundation on which success is built. It’s vital to thoroughly prepare for an IPO and a sustained post-launch.

Guide to Going Public

Strategic considerations before, during and post-IPO

Read more


To maximize your chances of successfully transitioning to life as a public company, it’s vital to thoroughly prepare. But all the planning needed to launch an IPO can be wasted if your efforts aren’t sustained post-launch.

About this article

By Martin Steinbach


Over 20 years of experience in the corporate finance field: IPO, M&A, private equity, venture capital and mezzanine finance. IPO thought leader.

Related topics IPO Innovation